The depot that tears up the rule Booker

What do you do if the lease is up on your depot, but you’ve just acquired a business with a far larger depot just down the road? If you’re Booker and the location is Sheffield, you turn your attention to converting that Makro into a test-bed depot for your newly enlarged business.

After getting the green light to acquire Makro in April, Booker moved out of its 35,000 sq ft depot, which was turning over around £40m, and relocated to the 100,000 sq ft Makro depot just 400 yards away on a hillside overlooking the city.

The size of the Makro depot made the decision an easy one, says stores director Andrew Muldoon. “When a Booker lease comes up we always ask ourselves two questions - ‘do we want to be in that market and is the building fit for purpose?’” he explains. “Answering the first question was easy because Sheffield is a great market for us. But the answer to the second question was no. We needed more room.”

Retailers, especially, needed extra space, he says. They made up 90% of the customer base at Booker Sheffield and were asking for more deliveries, which the old depot couldn’t service.

The challenge was to turn the new depot, one of 30 owned by Makro, into a facility that could service both Booker and Makro customers - and boost turnover from the relatively paltry £20m the old Makro had been generating to the level you’d expect of a Booker.

The space has certainly been made to work much harder in the new ‘best of both’ facility, which relaunched in July. Taking 35,000 sq ft of under-utilised floor space, Booker has created a separate Booker Wholesale depot with its own entrance at the side of the site for retail customers. Amalgamating Booker and Makro’s catering offers has given Booker more space than its retail customers in Sheffield ever had - meaning more products are stocked and availability is better.

Another new feature in the Booker Wholesale is a delivery area for retail customers, which director of delivery Barry Richardson says could be replicated in 30 to 50 locations. “In the old Booker, goods for delivery were picked off the shop floor, which affected availability,” he says. “Now, all high-volume products, especially Premier promotions, are located here. It has allowed us to quadruple the deliveries we had before.”

The delivery area is also being configured to handle catering deliveries and already offers access to five ambient and two chilled/frozen docks.

On the other side of the wall separating the two offers, Makro’s non-food offer has been reduced by a third and the number of SKUs halved from 7,000 to 3,500. With more emphasis on ‘business professionals’, the range now majors on cleaning, workwear and catering equipment rather than the TVs, toys and big ticket lines favoured by Makro before.

Despite the reduction in the size of the range, sales and customer satisfaction levels have actually increased, says sales director for small business Sam Newton. “The results are really promising so far. Less is definitely more,” she says, adding that Makro’s non-food range will start appearing in Booker depots over the next few weeks.

Other examples of Booker’s ‘best of both’ approach include its introduction of its Farm Fresh range and basic catering range Chefs Essentials into Makro. Counters have also been added to Makro’s meat offer so that customers can get advice from its trained butchers. Makro’s fresh herb range has also been relaunched under Farm Fresh and is now also available in Booker.

And after being trialled in Booker’s Brighton depot, Booker has rolled out its premium offer Ritter Courivaud to Makro Sheffield as well as Makro Manchester.

Booker also has its focus firmly on the Sheffield market itself. It has added ‘Sheffield’ to its fascia, and SKUs that do well in the city have been given greater prominence and shelf space including Primus lager and Henderson’s Relish.

“We anticipate launching a further six joint sites in the next year, but they won’t be the same as this,” explains CEO Charles Wilson. “All our area managers have had a look around and they have all taken back learnings, but we will tailor each joint site to its location. This solution is right for Sheffield.”